2015 Tax Advocacy Comment Letters

Jeffrey A. Porter, CPA, Chair of the AICPA Tax Reform Task Force, testified today to the Senate Committee on Small Businesses and Entrepreneurship that targeted tax reform solutions are needed in order to help relieve tax compliance burdens for America’s small businesses. Respectfully, we submitted comments on the following issues:

Troy K. Lewis, CPA, CGMA, Chair of the AICPA Tax Executive Committee, testified today to the House Committee on Small Business that compliance with federal tax laws can act as a road block in the growth of small businesses and outlined steps Congress could take to remove those obstacles. He also stressed, in light of declining levels of taxpayer service by the Internal Revenue Service (IRS), that good taxpayer service is critical to small business owners.
July 16, 2015 - AICPA Comment Letter in Support of Vitter Bill

The comment letter is in support of the Small Business Tax Compliance Relief Act of 2015 which Chairman Vitter (of the SF Committee on Small Business & Entrepreneurship) is introducing. The bill has many proposals that the AICPA is in support of.

The AICPA submitted comments, to Congress, on H.R. 2821, the Partnership Audit Simplification Act of 2015 (“Act” or “Proposal”). While we believe the Proposal may improve certain aspects of IRS audit administration, we have serious concerns regarding this legislation, as currently drafted. Specifically, our comments regarding the Proposal address the following issues:

The American Institute of Certified Public Accountants (AICPA) provides comments on the Form 990, Return of Organization Exempt from Income Tax, and instructions. Our matrix includes comments and recommendations for the 2015 forms and instructions, while indicating the importance and urgency of each recommendation. This annual Form 990 comments matrix is a project conducted by the AICPA Exempt Organizations Taxation Technical Resource Panel. Our group is comprised of practitioners who serve tax-exempt organizations and are experienced with both the nuances of the form and the challenges that arise for taxpayers in trying to complete it.

The AICPA Exempt Organizations Technical Resource Panelsubmitted a comment letter to the IRS and Treasury requesting a revision to Treas. Reg. § 53.4944-1(a)(2) in regard to investments that jeopardize the carrying out of the exempt purposes of a private foundation.

The AICPA submitted written testimony for the hearing record in support of H.R. 2315, The “Mobile Workforce State Income Tax Simplification Act of 2015.” The AICPA said it believes the bill would provide long-overdue relief from the current web of inconsistent state income tax and withholding rules that impact employers and employees.

The AICPA submitted the 2015-2016 Priority Guidance Plan that identifies and prioritizes guidance projects that the Treasury Department and the IRS should address through regulations, revenue rulings, revenue procedures, notices and other published administrative guidance.

Present law allows buyers and sellers discretion in choosing a tax method of accounting for deferred revenue liabilities in the context of a taxable asset acquisition. We understand that the government is considering issuing guidance that would provide for consistent tax treatment of the deferred revenue liability by buyers and sellers in taxable asset acquisitions. The AICPA believes that providing an elective tax safe harbor under which the buyer and seller agree to consistently treat the deferred revenue liability would reduce controversy between taxpayers and the Internal Revenue Service (IRS) and mitigate concerns the government might have related to inconsistent tax treatment by buyers and sellers in such transactions.

On April 15, 2015, the U.S. House of Representatives, Committee on Small Business, held a hearing on “Tax Reform: Ensuring that Main Street Isn’t Left Behind,” to examine the need for and potential economic benefits of comprehensive tax reform. In the interest of good tax policy and effective tax administration, specifically focusing on the simplification of small business income tax, we respectfully submitted comments on the following key issues:1. Cash Method of Accounting2. Tangible Property Regulations – De Minimis Safe Harbor Threshold3. Civil Tax Penalties4. Permanence of Tax Legislation5. Retirement Plans6. Alternative Minimum Tax Repeal7. Tax Return Due Date Simplification8. IRS Taxpayer Assistance

The AICPA recommends increasing the de minimis safe harbor threshold amount for taxpayers without an AFS from $500 to $2,500. We also recommend adjusting the threshold amount on an annual basis for inflation to maintain the fairness and incentive of the intended benefit, and to expand the AFS definition to allow more taxpayers to benefit from the higher $5,000 threshold.

The AICPA sent a comment letter to the Senate Finance Committee Tax Reform Working Group (Community Development & Infrastructure) specifically focusing on the simplification of community development and infrastructure taxation, we respectfully submit our recommendations for permanent tax provisions related to disaster relief.

The AICPA sent a letter to the SFC Tax Reform Working Group offering the AICPA as a resource to: offer suggestions from an administrative and practical standpoint; identify potential pitfalls of a particular provision; discuss the “small business” perspective; provide informal feedback on legislative language; and support legislative provisions that are officially approved by our Tax Executive Committee.

Our focus in this 2015 Compendium of Tax Legislative Proposals is on changes to 34 provisions in the Internal Revenue Code that need attention, recommendations that are technical in nature and recommendations that perhaps can be readily addressed. This Compendium includes items focused on improving tax administration, making the tax code fairer, and effectively promoting important policy objectives.

This letter addresses two interpretive issues that the AICPA identified in the application of Rev. Proc. 2004-34 and Treas. Reg. § 1.451-5. Specifically, this letter addresses issues related to the treatment of advance payments deferred under Rev. Proc. 2004-34 or Treas. Reg. § 1.451-5 when the stock of the taxpayer is acquired and the application of Rev. Proc. 2004-34 to advance payments received from members of an affiliated group. The AICPA also recommends that additional guidance be issued to clarify these rules.

The AICPA urges the Senate to approve the bilateral income tax treaties and protocols currently pending before them. The AICPA believes income tax treaties are vital to United States economic growth as well as U.S. trade and tax policy. Tax treaties are also important tools used to promote a competitive environment to attract foreign investment into the U.S. In order to serve their intended purpose, tax treaties must be kept up to date with developments in the global economy. However, several income tax treaties and protocols have been awaiting approval by the full Senate since 2010.

This AICPA letter suggests Congress include in the tax reform legislation important technical changes to permit administrative relief (i.e., providing the Internal Revenue Service permission to grant “section 9100 relief”) for certain late or defective elections upon a showing of good cause by a taxpayer. Section 9100 relief, which is currently available with regard to some elections, is extremely valuable for taxpayers who miss the opportunity to make certain tax elections. Congress needs to provide statutory authority in order for the IRS to have authority to grant administrative relief in appropriate situations for provisions that have statutory deadlines and relief is not already authorized.

Attached is the AICPA’s comment letter in response to the House Ways and Means Committee Chairman Dave Camp's discussion draft of the proposed Tax Reform Act of 2014, a tax reform legislative act. The AICPA provides general comments on an efficient and effective tax system based on principles of good tax policy. The AICPA also provides support for provisions such as tax reform for individuals, the repeal of the alternative minimum tax, business tax reform, participation exemption system for the taxation of foreign income, tax exempt entities and tax administration and compliance.